Rooftop Solar

Solar energy in the United States has exploded over the past decade. In 2010, 667 megawatt (MW) was installed in homes. By 2020, this had increased by 27 times to over 18,061 MW.[1]At the same time, the cost of a residential solar system has come down to half of what it was, even before incentives are applied, and continues to drop. Rooftop solar has increasingly become an option for many households across the country. Many areas offer attractive Renewable Energy Credits (RECs) that, when coupled with federal and local incentives, can make rooftop solar an attractive financial choice that is also good for the environment.

Use this buying guidance to learn more about your options, how to ask the right questions of contractors, and to determine if rooftop solar is right for you.

Start with a home assessment to understand your home’s condition and eligibility.

• Do you own your home?

If not, you should look for other ways to get renewable energy for your household.

• What is the condition of your roof?

If your roof needs renovations, it makes sense to replace it before installing solar panels to avoid having to remove and reinstall the panels at a later date. Make your roofing company aware that you will be installing solar panels and ask them if they will come back after they are installed to ensure the panels have not damaged the roof.

The direction and pitch of your roof are important. The amount of energy produced is impacted by how much sun the panels receive, so shadows, trees, other homes or buildings can impact your ability to maximize solar production. Google Project Sunroof is a tool that can address most of these concerns. This tool uses images from Google Earth and analyzes the roof shape to provide you with a personalized solar plan, taking local weather patterns into consideration. PVWatts is another tool from the National Renewable Energy Laboratory (NREL), which uses information you provide to help you determine if solar is right for you. 

• How much solar energy should you try to generate?

It is important to understand the regulations in your area (even down to whether the Homeowners Association has any guidelines surrounding the installation) and to know your electricity consumption (kWh) and rates.

Net Metering is an utility policy which allows consumers in some areas to receive a credit on their electricity bill by returning any unused solar electricity they generate back to the grid. Some states and service territories are compensating for excess electricity at rates lower than what a customer would typically pay for electricity. To maximize the financial benefits, it is recommended that the system is designed in accordance with your electricity usage to ensure optimal savings over time.

Buy or Lease? What is the best option for you?

The decision to buy or lease a solar system will depend on your finances, state laws and utility policies.  

If you decide to buy a system, you:

• reap the benefits of the electricity produced;
• would be entitled to tax credits or other incentives;
• are responsible for system maintenance;
• can sell the system, if you move.

On the other hand, if you lease a system:

• the solar system company owns it and is responsible for its maintenance.
• You can enjoy cheaper electricity with very low or no upfront costs and monthly payments at agreed rates.

Before signing the lease, ask about your options in the event you decide to sell your property.  Zillow has estimated that homes with solar panels sell for 4.1% more compared to homes that are not powered by solar power.[2]

Buying the solar panels directly could unlock additional dollars. First, if you purchase the system there are federal tax incentives through 2023. Your local area may have additional incentives in place to further reduce the cost of the system. Also, there are benefits through Renewable Energy Credits (RECs), that may be sold. The rates received from the RECs vary greatly by state so it is good idea to discuss with your solar provider on what those numbers are. Finally, there is also the electricity generated which will lower some or perhaps all of your electric bill depending on the month. Keep in mind that solar production will be dependent on the season so you should expect more production in the summer and less in the winter. The sum of these savings (tax incentives, RECs, and electricity generation) can be great. In 2016, Consumer Reports estimated that a New Jersey home which purchased a solar roof in cash could result in about $60,000 of savings over 20 years. If the family took out a loan for the entire project, there were still $20,000 in savings over the same 20 year period. [3]

If you lease solar panels, you generally pay the solar company a monthly rate and the solar company continues own the panels and provide maintenance.  You can get the benefits of the electricity generation without the upfront cost.  However, there are fewer direct financial benefits as customers in the leasing model do not have access to the RECs nor the tax credit and other state financial incentives. With that said, there are still benefits. In this case, Consumer Reports estimated the benefits from leasing to be at $25,000 in savings over 20 years.[4]

Questions to ask your solar provider when getting a proposal.

As with any large purchase, it pays to get multiple quotes. NREL recommends requesting multiple quotes. Remember that there is likely to have been someone else in your neighborhood that has installed solar on their home so check your neighborhood listserv for recommendations. As you obtain quotes from those solar providers, consider this list of questions to ask so that you can get a sense of their work quality and the financial benefit of the system.

1. How many systems has the solar provider installed in the past year?
2. What is the system size and total installation cost?
3. How much electricity will the system generate over the course of a year and what will be the total approximate savings of the system?
4. What upgrades does my home need? Would I need a new roof, updated wiring, clearing of trees updated utility interconnection?
5. How will I be reimbursed for any excess electricity produced? Does my jurisdiction allow net metering?
6. What does the warranty cover and who is responsible for maintenance and cleaning?
7. Who is responsible for utility interconnection, permissions, and inspections?
8. What happens if I decide to sell my home? What are the conditions for new occupant?
9. Who should I contact if my system fails?
10. What to do in the event of a blackout?
11. If you are considering leasing as a model, consider:
    1. What is the length of the lease?
    2. What is the upfront cost and how much do I need to pay over time? The terms may be different depending on the provider so make sure to do the math on how it breaks out.

How to select a solar provider?

Once you have your quotes, it is important that you get the best deal and closely examine the underlying terms and conditions. Look for an installation company that is licensed, has credentials from a certified body, such as the North American Board of Certified Energy Practitioners, and is insured. A good solar provider will offer you a variety of panels and inverters adhering to your aesthetic requirements with appropriate performance warranties. Have them walk you through the options and think about how the panels will look on your home so that you are happy with the result. Keep the warranty in mind. String inverters typically carry a 10-year warranty while micro-inverters can go all the way up to 25 years. Solar panels usually carry a 20-year warranty.

Make sure to compare the average wait time, scheduling, and project completion times for different providers. Lastly, the best provider will be completely transparent about savings, associated assumptions, system monitoring, maintenance and all the estimated costs. The Solar Energy Industry Association’s (SEIA) National Solar Database includes a list of manufacturers and installers across the United States.[5]